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NEW QUESTION # 246
A national Financial Intelligence Unit, which is responsible for receiving, analyzing and disseminating disclosure of financial information, should consider becoming a member of what organization?
- A. The Basel Committee
- B. The Financial Action Task Force
- C. The Egmont Group
- D. The Wolfsburg Group
Answer: C
NEW QUESTION # 247
Which red flags should be considered prior to establishing a relationship with a third party? (Select Two.)
- A. The third party has sufficient capability to provide the services or goods for which it is being engaged.
- B. The third party's amount to be paid for goods and services appears to be reasonable.
- C. The third party has a lack of anti-corruption compliance clauses in agreements.
- D. The third party has requested unusual payment or billing procedures.
- E. The third party has a declaration of non-family or business ties with government officials.
Answer: C,D
Explanation:
Explanation
The red flags that should be considered prior to establishing a relationship with a third party are the lack of anti-corruption compliance clauses in agreements (A) and unusual payment or billing procedures requested by the third party (C). According to the Certified Anti-Money Laundering Specialist (CAMS) Sixth Edition manual, "red flags include, but are not limited to: [...] lack of anti-corruption compliance clauses in agreements (page 330) and unusual payment or billing procedures requested by the third party (page 331)."
NEW QUESTION # 248
In order to protect investigative materials from disclosure when conducting an internal Investigation of any employee of a financial institution, legal counsel of that financial should________?
- A. Refuse to provide any records or documents to law enforcement because the bank has client privilege with its bank customers
- B. Let the bank hire any and all contract investigators to conduct the internal investigation. That way Legal is not a party to the action and may remain independent
- C. Request formal company authorization to conduct the investigation. Such authorization should be granted, if possible, by the board of directors or audit committee
- D. Not mark files or documents with privileged and Confidential: Attorney-Client Privilege and/or Work-Product. Those marks will only encourage law enforcement
Answer: C
Explanation:
According to the Anti-Money Laundering Specialist (the 6th edition) study guide, one of the best practices for conducting an internal investigation is to request formal company authorization to conduct the investigation. Such authorization should be granted, if possible, by the board of directors or audit committee, as this will help to establish the independence and legitimacy of the investigation, as well as the protection of the attorney-client privilege and the work product doctrine1. The other options are incorrect because:
B: Refusing to provide any records or documents to law enforcement may be seen as obstructing justice or violating regulatory obligations, and may also result in the loss of the privilege or the imposition of sanctions or penalties23.
C: Letting the bank hire any and all contract investigators may compromise the quality and integrity of the investigation, as well as the protection of the privilege or the work product doctrine, as the investigators may not be properly supervised or instructed by legal counsel, or may not be covered by the Kovel doctrine45.
D; Not marking files or documents with privileged and confidential: attorney-client privilege and/or work-product may undermine the claim of the privilege or the work product doctrine, as it may indicate that the materials were not prepared for the purpose of seeking or providing legal advice or in anticipation of litigation, or that they were not intended to be kept confidential67.
References:
1: ACAMS, CAMS Certification Package - 6th Edition, Chapter 5, page 150
2: ACAMS, CAMS Certification Package - 6th Edition, Chapter 5, page 151
3: Perkins Coie, Protecting Internal Investigation Materials From Disclosure, Updates, August 10, 2020
4: ACAMS, CAMS Certification Package - 6th Edition, Chapter 5, page 150
5: Eversheds Sutherland, Legal privilege of corporate internal investigations under US law - 2019 caselaw update, JDSupra, December 20, 2019
6: ACAMS, CAMS Certification Package - 6th Edition, Chapter 5, page 150
7: Norton Rose Fulbright, Internal investigations: when does privilege apply?, Global law firm, September 11, 2018
NEW QUESTION # 249
A customer runs an export business for agricultural products. There has been steady growth over the years from sales to the Caribbeanregion. A sudden increase is noted in this customer's account balances during the last month. On what grounds should an anti-money laundering specialist prepare a suspicious transaction report?
- A. Travelers checks (cheques) were purchased for trips to a Non-Cooperative Countries and Territories.
- B. Wire transfers are coming from a Financial Action Task Force member country.
- C. The increased activity is due to money order deposits.
- D. The client changed his address without advising the institution.
Answer: D
NEW QUESTION # 250
What facilitates law enforcement agent obtaining evidence from authorities in a foreign country relating to criminal activity?
- A. MLAT Executive Agreement
- B. The World Wide Network of Information Sharing
- C. Mutual Legal Assistance Treaties (MLAT)
- D. PatriotAct Communications System
Answer: C
NEW QUESTION # 251
Which regulation regarding data privacy has to be considered while carrying out a financial crime investigation?
- A. European Enforcement Order
- B. Rome II Regulation
- C. Securities Financing Transactions Regulation
- D. General Data Protection Regulation
Answer: D
Explanation:
Explanation
The General Data Protection Regulation (GDPR) is a regulation issued by the European Union (EU) that sets out requirements for the processing and protection of personal data. It applies to any company that processes personal data of individuals in the EU, and requires organizations to take appropriate measures to protect the personal data of individuals, such as implementing appropriate security measures, limiting the amount of data collected and stored, and providing clear explanations of how the data will be used. In the context of financial crime investigations, the GDPR requires organizations to ensure the security and confidentiality of personal data that they collect and process, and to take measures to ensure that the data is used only for the purpose of the investigation and not for any other purpose.
NEW QUESTION # 252
The new compliance officer has reviewed the bank's anti-money laundering training program. The program consists of online training for all new employees within 30 days of hire date and annual refresher training to all employees. In addition, there is specialized training for areas that deal with higher risk products and customers.
Over the last year, there have been no regulatory changes and no new products or services have been introduced. The compliance officer wants to propose to the board of directors that the annual refresher training is still current and can be delivered unchanged to all employees.
Which two critical pieces of information could be missed by taking this approach? (Choose two.)
- A. Changes to internal policies, procedures, and processes
- B. Links to enforcement actions identifying violations in other financial institutions
- C. Any new trends, developments, or risks
- D. Results of the previous year's risk assessment
Answer: B,C
Explanation:
By delivering the same annual refresher training to all employees, the compliance officer could miss the opportunity to update the staff on any new trends, developments, or risks that have emerged in the anti-money laundering field. For example, new typologies, indicators, technologies, or best practices could be relevant for the staff to be aware of and apply in their daily work. Moreover, the compliance officer could also miss the chance to share any links to enforcement actions identifying violations in other financial institutions that could serve as lessons learned or case studies for the staff to avoid similar mistakes or gaps in their compliance program.
References:
ACAMS CAMS Certification Video Training Course, Module 5: Risk Management, Lesson 5.4:
Training1
ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 5: Risk Management, Section 5.4:
Training2
NEW QUESTION # 253
Which scenario is closest to the definition of money laundering the United Nations Convention against Transnational Organized Crime and Other Protocols provided?
- A. Filing a suspicious transaction report when you know or suspect money laundering is taking place
- B. Knowingly financing a resort development with the proceeds of arms trafficking
- C. Discussing your suspicions with a client, thus giving the client the opportunity to switch service providers and to cover his tracks in future transactions
- D. Assisting a client in a property conveyance by effecting the transfer of ownership from the seller to the purchaser when you don't know the purchaser
Answer: B
NEW QUESTION # 254
How do payable through accounts (PTAs) differ from normal foreign correspondent accounts?
- A. The customers do not have to worry about sanctions list screening such as OFAC
- B. The customers can hide their identity through the use of cover payments in U.S. dollars
- C. The customers have the ability to directly control funds at the correspondent bank
- D. The customers can contact the correspondent bank directly to send wire transfers
Answer: C
NEW QUESTION # 255
A foreign bank maintains a correspondent account in the US. According to an investigation carried out by US authorities, the specific correspondent account seems to have facilitated a transaction involving tainted funds.
Which allows the US authorities to seize the funds of the foreign bank held with the US bank?
- A. The USA PATRIOT Act
- B. Regulations of the OFAC, US Department of Treasury
- C. The 6th EU AML Directive
- D. The FinCEN CDD Final Rule
Answer: A
Explanation:
The USA PATRIOT Act is a comprehensive legislation that was enacted in 2001 to enhance the powers and tools of the US authorities to combat money laundering, terrorist financing, and other threats to the national security and the integrity of the financial system. The USA PATRIOT Act contains several provisions that affect the relationship between US banks and foreign banks that maintain correspondent accounts in the US.
One of these provisions is Section 319, which allows the US authorities to seize the funds of a foreign bank held with a US bank, if the foreign bank refuses to comply with a subpoena or a request for records related to the correspondent account. This provision is intended to prevent foreign banks from using their correspondent accounts in the US to facilitate transactions involving tainted funds, such as proceeds of crime, funds intended to support terrorism, or funds subject to sanctions or asset freezing orders. Section 319 also requires US banks to maintain records of the owners and agents of foreign banks that have correspondent accounts with them, and to terminate such accounts if requested by the US authorities.
Therefore, if a foreign bank maintains a correspondent account in the US, and the US authorities find out that the account has been used to facilitate a transaction involving tainted funds, the US authorities can seize the funds of the foreign bank held with the US bank, under the authority of the USA PATRIOT Act.
References:
CAMS Study Guide - 6th Edition, Chapter 1, Section 1.2, page 10
USA PATRIOT Act, Section 319, page 55-57
The USA PATRIOT Act: A Legal Analysis, Section III, page 9-10
[The USA PATRI
Reference:
https://www.fincen.gov/fact-sheet-section-312-usa-patriot-act-final-regulation-and-notice-proposed-rulemaking
NEW QUESTION # 256
When and how should an institution appraise the AML risk of a newly developed product? Choose 3 answers
- A. The institution should evaluated where, how and to what extent the product is going to be used
- B. The institution should roll the product out on a preliminary basis to determine what risks develop with regard to the product
- C. The institution should review previous administrative actions to determine if the product has created problems for other institutions
- D. The institution should request the Compliance Officer to review and evaluate the AML risk prior to the product going live
Answer: A,B,D
NEW QUESTION # 257
A United States (U.S.) bank was recently alerted by law enforcement of an increase in sale of large denomination U.S. bank notes to casas de cambio. They suspect that a Mexican syndicate is operating a money laundering scheme in the bank's jurisdiction.
Which two steps should be taken to trace funds through the bank to assist law enforcement in their investigation? (Choose two.)
- A. Identify the money laundering scheme and submit a suspicious transaction report
- B. Identify deposits by casas de cambio that include third-party items including sequentially numbered monetary instruments
- C. Identify if there is a decrease in the sale of large denomination U.S. bank notes to casas de cambio by the bank
- D. Identify multiple wire transfers initiated by casas de cambio to jurisdictions outside of Mexico that bear no apparent business relationship with that casa de cambio
Answer: B,D
NEW QUESTION # 258
What should an effective anti-money laundering training program include?
- A. Lists of anti-money laundering regulations
- B. Real-life money laundering examples
- C. Computer-based modules titles differently for each job description in the bank
- D. Random testing of employees to ensure proper understanding of policies
Answer: B
NEW QUESTION # 259
A financial institution receives a regulatory enforcement action because of deficiencies in its anti-money laundering program.
Which action should the board of directors take?
- A. Purchase and install a new suspicious activity monitoring system
- B. Hire an attorney with instructions to protest the enforcement action
- C. Instruct the compliance officer to develop a plan to remediate the institution's anti-money laundering program
- D. Terminate the compliance officer and staff
Answer: C
Explanation:
Explanation/Reference:
NEW QUESTION # 260
Which of the following represents the first Financial Action Task Force initiative?
- A. The 40 Recommendations on Money Laundering
- B. The Special Recommendations on Terrorist Financing
- C. The Report on Non-Cooperative Countries and Territories
- D. The Report on Money Laundering Typologies
Answer: A
NEW QUESTION # 261
Which type of sanctions are likely to be used first in order to avoid escalating violent conflicts and/or proliferation of weapons?
- A. Arms and related materials embargo
- B. Financial prohibitions
- C. Export and import restrictions
- D. Asset freeze
Answer: C
Explanation:
Export and import restrictions are sanctions imposed by countries to limit or prevent the import or export of certain goods and services. Export and import restrictions are typically used in order to protect a country's economic or political interests, or to prevent the proliferation of weapons or other dangerous materials. Export and import restrictions are often the first type of sanctions used in order to avoid escalating violent conflicts and/or proliferation of weapons. Examples of export and import restrictions include embargoes, quotas, or tariffs.
NEW QUESTION # 262
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